RENDERED: OCTOBER 20, 2023; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2022-CA-0101-MR

GRANGE INSURANCE COMPANY APPELLANT 

v. 

APPEAL FROM FAYETTE CIRCUIT COURT

HONORABLE JULIE M. GOODMAN, JUDGE

ACTION NO. 19-CI-01315

GEORGETOWN CHICKEN COOP, 

LLC; ANTHONY CRISH; CHAD 

GIVENS; COCK-A-DOODLE-DOO, 

LLC; PRESTON RESTAURANT “A,”

LLC; AND ROBERT GAUTHIER APPELLEES 

OPINION

REVERSING 

**   **  **

BEFORE: EASTON, LAMBERT, AND MCNEILL, JUDGES.

EASTON, JUDGE: This appeal involves a dispute about insurance coverage, 

specifically coverage under an “umbrella” policy. We will refer to the Appellees 

collectively as “Roosters,” which is the name of the business owned or operated by 
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the limited liability companies or individuals named as Appellees.1 The Appellant, 

Grange Insurance Company (“Grange”) issued two insurance policies for Roosters

– a Business Owners’ Policy (“BOP”), and a Commercial Umbrella Policy 

(“CUP”). All agree the BOP provides coverage. Having reviewed the record, we 

do not find an ambiguity in the CUP, which does not provide coverage. We 

reverse the circuit court and direct entry of a declaratory judgment in favor of 

Grange. 

FACTUAL BACKGROUND 

On the night of January 5, 2019, Joey Lee Bailey (“Bailey”), was 

served and consumed alcohol at Roosters in Georgetown. After leaving Roosters, 

Bailey went to another place called “Horseshoes” in Lexington, where Bailey 

continued to drink.

2

 Then, during the early morning hours of January 6, 2019, 

Bailey was driving the wrong direction on Interstate 75. Bailey’s truck hit a 

vehicle carrying the five-member Abbas family. All six people were killed.

The estates of the Abbas family filed suit3against Roosters and others. 

Roosters filed a third-party petition for declaratory judgment against their insurer, 

1 Because of the resolution we reach, we need not address Grange’s assertion that the circuit 

court erred in granting summary judgment for certain individuals rather than specified insureds. 

2 Medical records in the file indicate Bailey’s post-mortem blood alcohol level was over .30. 

3 This record illustrates violation of Kentucky Rules of Civil Procedure (“CR”) 8.01(1) which 

mandates “a short and plain statement of the claim” made. The Sixth Amended Complaint 

contains 342 numbered paragraphs and is 60 pages long.
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Grange. Grange then sought a legal determination concerning their insurance 

coverage under the CUP. Roosters sought summary judgment, which was granted 

and designated as final and appealable pursuant to CR 54.02. Grange appeals to 

this Court as a matter of right. For the following reasons, we reverse. 

STANDARD OF REVIEW

When a trial court grants summary judgment in a declaratory 

judgment action with no bench trial, as it did here, “we use the appellate standard 

of review for summary judgments.” Foreman v. Auto Club Prop.-Cas. Ins. Co., 

617 S.W.3d 345, 349 (Ky. 2021) (citation omitted). “Because summary judgment 

involves only legal questions and the existence of any disputed material issues of 

fact, an appellate court need not defer to the trial court’s decision and will review 

the issue de novo.” Lewis v. B&R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001) 

(citation omitted). 

In this case, the underlying facts and the terms of the applicable 

policies are undisputed. The remaining interpretation and construction of an 

insurance contract is a matter of law, which again we review de novo. AutoOwners Ins. Co. v. Veterans of Foreign Wars Post 5906, 276 S.W.3d 298, 301 

(Ky. App. 2009). As review is de novo, “no deference is given to the decisions of 

lower tribunals, even as to the existence of an ambiguity.” Kentucky Employers’ 

Mutual Ins. v. Ellington, 459 S.W.3d 876, 881 (Ky. 2015).
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ANALYSIS

Instead of drafting individual word-for-word policies, the process for 

constructing insurance policies begins with standard provisions in a form policy. 

The process then relies upon other standard phrases, easily added, or deleted, 

which serve to add or exclude coverage with identified exceptions. Finally, 

endorsements may govern whether any provision within the form policy applies. 

We are required to consider the entirety of the various combined provisions 

together. KRS4 304.14-360.5 See Kemper Nat’l Ins. Companies v. Heaven Hill 

Distilleries, Inc., 82 S.W.3d 869 (Ky. 2002) (applying the substantive provisions of 

an endorsement to exclusions in the preceding form policy). This traditional 

approach usually requires careful perusal and comparison by insureds to be sure of 

their coverage.6

By finding an ambiguity, the courts may not rewrite the plain 

language of a policy examined as a whole. Pryor v. Colony Insurance, 414 S.W.3d 

424, 430 (Ky. App. 2013), abrogated on other grounds by Estate of Bramble v. 

4 Kentucky Revised Statutes.

5

“Every insurance contract shall be construed according to the entirety of its terms and 

conditions as set forth in the policy, and as amplified, extended, or modified by any rider, 

indorsement, or application attached to and made a part of the policy.”

6

In this digital age, one wonders why this practice continues. Policies could arguably be crafted 

individually as one document rather than through a process of forms and exceptions and 

endorsements cobbled together. Even so, we must proceed under the law for policy 

interpretation with the existing practice. 
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Greenwich Insurance Company, 671 S.W.3d 347 (Ky. 2023). In the present case, 

the circuit court declared an ambiguity in Paragraph 12 of the Summary Judgment 

at Pages 7-8. The circuit court stated there were two reasonable interpretations 

from the language but then did not further illustrate how the interpretations are 

supported when all language of the policy is considered together. The circuit court 

also made a general observation about umbrella policies. Essentially, the 

ambiguity declared became contextual by comparing underlying coverage and the 

overall terms of the “umbrella” policy.

The difficulty flows from the following paragraph in the circuit 

court’s Conclusions of Law:

In analyzing the contract, the Court also 

acknowledges that it cannot ignore the purpose of an 

umbrella policy, that it is created to supplement the 

underlying policy. Acknowledging that, then, the Court 

understands that when an insured purchases both an 

underlying and umbrella policy, the intent is for them to 

work in concert. There is no purpose for an umbrella 

policy if not to supplement the underlying policy if 

exhausted. 

The primary insurance for Roosters was provided by Grange with the BOP. 

Liquor liability coverage was provided by an endorsement to the BOP. No one 

argues about that coverage. Roosters decided also to purchase the CUP, an 

umbrella policy with Grange. Policies providing excess coverage include what are 

often called umbrella policies, but, as in a real-life thunderstorm, some umbrellas 
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provide more coverage than others: your feet may still get wet with the best 

umbrella.

The parties cite no case applying Kentucky law addressing conflict 

between primary coverage and an exclusion in an umbrella policy. We have found 

no Kentucky case on point. Authorities from other states help provide an answer. 

As a general statement, umbrella policies, as one form of excess 

coverage, follow the primary policy and provide additional coverage. Such 

policies often provide additional coverage for some claims not in the primary 

policy. 46 C.J.S. Insurance § 1627 (2023). An umbrella is not necessarily a 

mirror image of the primary coverage. If a mirror image is the intent, the practice 

of a clear “broad as primary” endorsement could be used. See, e.g., McDonald’s 

Corp. v. American Motorists Ins. Corp., 748 N.E.2d 771, 774 (Ill. App. 2001).

An umbrella policy may have its own exclusions. We find no 

authority for the proposition that an umbrella cannot exclude additional coverage 

for certain claims covered by a primary policy. When an umbrella policy is called 

upon to provide coverage for claims, “an umbrella policy does not automatically 

drop down; in order for it to do so, none of its exclusions can apply.” 46 C.J.S. 

Insurance, supra. In support of this statement the author of this CJS section cited 

Boggs v. Camden-Clark Memorial Hospital Corporation, 693 S.E.2d 53 (W. Va. 
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2010). This case includes a collection of cases independently examining 

exclusions in umbrella policies. Id. at 69 n.28.

One of the cases collected in Boggs is Weitz v. Allstate Insurance

Company, 642 A.2d 1040 (N.J. Super. Ct. App. Div. 1994). In Weitz, the court 

held an umbrella policy which excluded injuries to members of the insured’s 

household prevented coverage even though the claim was covered by a primary 

auto liability policy. The court further explained:

The [umbrella] policy should not be read as simply an 

endorsement to basic policies to raise their dollar limits. 

It provides coverages unavailable in auto and 

homeowners’ policies, for example, for defamation, 

malicious prosecution, false arrest, invasion of privacy, 

and violation of civil rights. As its coverages depart from 

auto and homeowners’ policies, it should not be a 

surprise that its exclusions are also different.

Id. at 1041.

In the specific context of an umbrella policy with a liquor liability 

exclusion, we have found only one unpublished case addressing an umbrella 

exclusion of liquor liability, even though a primary policy provided such 

coverage. Berkhouse v. Great American Assurance Company, No. 13-0264, 2013 

WL 6152414 (W. Va. Nov. 22, 2013) (umbrella exclusion upheld). While the 

circumstances of any cited case may be distinguishable, the general principle 

applies – an umbrella policy may exclude additional coverage for specific claims 
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covered by a primary policy. With this understanding of this general principle, 

we should again examine the undisputed facts of this case regarding the CUP. 

The first paragraph of the CUP at issue states: “Various provisions in 

this policy restrict coverage. Read the entire policy carefully to determine rights, 

duties and what is and is not covered.” The body of the policy contains Section I –

Coverages, Subsection 2. Exclusions, with subsection c. Liquor Liability. This 

Section I 2 c excludes Liquor Liability but makes an exception for liability arising 

from the business of the insured of serving alcohol. The language then indicates 

the umbrella coverage will follow the primary policy, “unless otherwise directed 

by this insurance.”

An otherwise direction is provided by Endorsement CU 47:

Endorsement CU 47 

LIQUOR LIABILITY EXCLUSION 

This Endorsement Changes The Policy. Please Read 

It Carefully.

This Endorsement modifies insurance provided under the 

following:

COMMERCIAL LIABILITY UMBRELLA PART

Exclusion c. of Paragraph 2. Exclusions of SECTION ICoverage A - Bodily Injury and Property Damage 

Liability is replaced by the following:

c. Liquor Liability
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“Bodily injury” or “property damage” for which any 

insured may be held liable by reason of:

(1) Causing or contributing to the intoxication of 

any person;

(2) The furnishing of alcoholic beverages to a 

person under the legal drinking age or under 

the influence of alcohol; or 

(3) Any statute, ordinance or regulation relating 

to the sale, gift, distribution or use or 

alcoholic beverages.

This exclusion applies only if you are in the business of 

manufacturing, distributing, selling, serving or furnishing 

alcoholic beverages.

The words, as they appear above, except for the last sentence, repeat the already 

existing language in the same section of the underlying umbrella policy, but most 

of the additional two paragraphs, which are clearly part of Section I 2 c. in the 

body of the policy, is gone. 

The word replace has an unambiguous meaning. Merriam-Webster 

defines replace as, “1. To restore to a former place or position; 2. To take the 

place of especially as a substitute or successor; 3. To put something new in the 

place of.” Replace, MERRIAM-WEBSTER, https://www.merriam-webster.com/

dictionary/replace (last visited Oct. 16, 2023). The CU 47 endorsement replaced 

the entirety of Section I 2 c of the policy, intentionally deleting the paragraphs 

which otherwise would have provided coverage. 
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The parallel wording of the endorsement and original document, along 

with the word “replace,” plainly indicate that the only reason this endorsement 

existed was to remove the paragraphs in the policy form which otherwise would 

have followed the more limited language in CU 47. The longer version of this 

section of the policy was to be replaced in its entirety by the shorter version. The 

shorter and more limited language in CU 47 was intended to be the full and 

complete language of Section I 2 c. 

It does not make sense for CU 47 to be considered a supplement for 

the extra language found in the form policy, because the plain language of CU 47 

was to replace all the original language. The text left was essentially the same as 

the text replaced except for the deleted paragraphs. Finding no ambiguity within 

the CUP itself and recognizing an umbrella does not have to mirror a primary 

policy, there is no ambiguity when the entire CUP is read. The replacement of the 

entire section modified the overall coverage of the policy. 

The word replace is not technical. When batteries run down, we 

replace them. When we do so, we do not chop up parts of the old batteries and 

graft them to newer parts. The old batteries are removed completely, and the new 

ones replace them. The same is true with the policy language here. The entire 

section in the form policy was removed and replaced by the language of the 

endorsement.
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Without an ambiguity, the expectations of the insured do not control. 

True v. Raines, 99 S.W.3d 439, 443 (Ky. 2003). This record does not tell us 

whether or why Roosters did or did not seek the additional umbrella coverage for 

liquor liability. The circuit court and this Court could equally assume Roosters just 

thought there would be more coverage because of their idea of an “umbrella.” But 

they could have decided not to pay the cost for such additional coverage. Grange 

may have decided to limit its liability by not extending liquor liability by an 

umbrella.

But courts are not in the business of assumptions. Rather, we apply 

facts to the law. None of these referenced assumptions have evidentiary support in 

the record. But it is at least curious that there was no response to Grange’s clear 

denial of umbrella coverage for two years – no letter or other communication 

documented to suggest anyone with Roosters felt misled or confused about the lack 

of liquor liability coverage in the umbrella they had purchased.

CONCLUSION

For the foregoing reasons, we REVERSE the Fayette Circuit Court 

and direct a declaratory judgment that the CUP does not provide coverage and thus 

also does not impose a duty under the CUP to defend the claims in this case. 
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LAMBERT, JUDGE, CONCURS.

MCNEILL, JUDGE, DISSENTS AND FILES SEPARATE 

OPINION.

MCNEILL, JUDGE, DISSENTING: I respectfully dissent. First, I believe that the 

circuit court reached the proper result with sufficient explanation. The record 

reflects that the trial judge has been immersed in this difficult case for years, and is 

certainly well-acquainted with the underlying issues and facts. Moreover, the trial 

court observed that “[i]n analyzing the contract, the Court also acknowledges that 

it cannot ignore the purpose of an umbrella policy, that it is created to supplement 

the underlying policy.” (Emphasis added.) Although the majority cites this 

finding, it does not discuss the remainder of the circuit court’s reasoning. In any 

event, even if the underlying judgment lacked support, our de novo standard 

requires this Court to conduct a fresh review of the matters presented, without 

reliance upon the underlying judgment. And like our standard of review, the 

substantive law is clear, “[i]f the contract language is ambiguous, it must be 

liberally construed to resolve any doubts in favor of the insured.” Wolford v. 

Wolford, 662 S.W.2d 835, 838 (Ky. 1984) (citation omitted). 

As to the merits, the majority reverses the circuit court on the basis 

that there is no ambiguity in the relevant contractual provisions. In support, the 

majority discusses umbrella coverage generally, supported in part by citation to 

non-binding authority. However, the present issue is not novel. And the question 
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posed is purely legal – is there ambiguity? I find in the affirmative. Although, I 

acknowledge that reasonable minds may differ – as occurred here. More precisely, 

four judges have reviewed this matter. Two have found ambiguity, and two have 

not. While the latter conclusion mandates the present disposition, the disagreement 

between the reasonable minds having pondered this issue is, at least, a facial 

indication of ambiguity. Yet, the ambiguity here is more than cosmetic. 

For example, the majority does not address the exception to the 

exclusion language also contained in the CUP. In other words, negation language 

replaces such prior language, but says nothing of the affirmative language 

following the original exclusion. Unless it is made abundantly clear that all such 

language abrogates all prior language, which was not the case here, there is 

ambiguity. This is essentially the same reason advanced by the circuit court. And 

when buttressed with the circuit court’s relevant observation that the purpose of 

this umbrella policy is to supplement the underlying policy, I agree with the circuit

court’s conclusion that “two reasonable interpretations could be made of the 

language . . . .” Therefore, I would affirm. 

BRIEFS FOR APPELLANT:

Robert L. Steinmetz 

Louisville, Kentucky 

BRIEF FOR APPELLEES:

Donald L. Cox

William H. Mooney

Louisville, Kentucky